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MEITUAN.COM, a Chinese group discount website backed by Alibaba Group Holding Ltd., is considering a U.S. initial public offering (IPO) as it forecasts sales to triple this year.
The company that offers discounts similar to Groupon Inc. expects transactions to more than double to 40 billion yuan (US$6.42 billion) this year from 16 billion yuan last year, chief executive officer Wang Xing said. Revenue is forecast to triple to about US$300 million, he said.
“In the future, yes,” Wang said when talking about plans for an IPO. “If you ask me now, I would prefer the United States.”
Meituan, which has 90 million active mobile users and is at least 10 percent owned by Alibaba Group, is tapping into China’s surging middle class, which is seeking deals for entertainment and restaurants. About 70 percent of the platform’s transactions are done through Meituan’s mobile applications as the company competes against Dianping.com, the Yelp-like website backed by Alibaba competitor Tencent Holdings Ltd., which is Asia’s largest Internet company.
Wang said that Meituan isn’t under short-term funding pressure and doesn’t want to be acquired.
“We prefer to grow independently because we believe the market is big enough,” he said.
Meituan, which began offering its services in March 2010, attracted US$12 million from Sequoia Capital Operations LLC the same year and another US$50 million investment led by Alibaba and Sequoia in July 2011. The company broke even last year, Wang said.
E-commerce spending by Chinese consumers will reach 3.3 trillion yuan by 2015, according to a Bain & Co. report in August. China has more than 618 million Web users.
Alibaba, China’s biggest e-commerce company, filed May 6 for what may be the biggest IPO ever in the United States. The Hangzhou-based company owns between 10 and 15 percent of Meituan, Wang said.
Beijing-based Meituan offers local business-search services that include consumer-generated reviews. Users also can buy coupons and get group discounts. (SD-Agencies)
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